Orange Backs Out of Knology Deal1/10/2005 7:29 AM Eastern
Orange Broadband Inc. has terminated its agreement to purchase the Cerritos, Calif., system from Knology Inc., Knology said in a statement late Friday.
Orange had agreed in May to purchase the system, which has about 8,000 subscribers, for $14.8 million in cash. According to the press release, Orange was unable to reach an agreement with the city of Cerritos for the franchise transfer, which prompted Orange to terminate the deal.
Knology purchased the Cerritos system in December 2003 from Verizon Media Ventures Inc. as part of a larger $17 million deal in which Knology also acquired systems in Pinellas County, Fla., with about 53,000 subscribers.
“We are disappointed in Orange Broadband's decision to no longer pursue the Cerritos franchise. However, we are pleased with the interest we have received in the Cerritos property, and we are confident in our ability to reach an agreement with another buyer,” Knology CEO Rodger Johnson said in a prepared statement.
“We believe the city of Cerritos is excited about the opportunity to upgrade the cable system in Cerritos and is looking forward to negotiating a franchise providing for these system upgrades,” he added.
Knology said it will continue to engage DH Capital LLC as its exclusive advisor with respect to its efforts to sell the Cerritos property.